Telling the Rest of the Story

Uber: Will It Stay or Will It Go?

The Corpus Christi City Council voted 7-1 in favor of amending Chapter 57 of the City Code of ordinances to establish Article VI, which covers regulations for Transportation Network Companies, such as Uber, Lyft, and Sidecar. The ordinance addresses drivers and vehicles and was modeled after the Houston ordinance. Passage of the ordinance will allow the ridesharing companies to operate in the city legally. The ordinance goes into effect on Monday, March 14, 2016.

At-Large Councilman Mark Scott voted against the ordinance and said, “I don’t like this ordinance. This is an opportunity to reduce the regulation on the whole industry. Let’s take a time-out and look at what other communities are doing.” Scott suggested that the City look at the El Paso Model.

According an El Paso Inc article on Feb. 22, 2016, by David Crowder reported, “The final version of a new ordinance regulating El Paso’s vehicles for hire will force Uber to operate under city regulations, which the company has ignored for over a year. The new measure would eliminate a fingerprinting requirement that Uber doesn’t like, slash by more than 30 percent fees that taxi companies have paid, and reduce annual vehicle safety inspections from four to one.”

District 5 Councilman Rudy Garza likened the multi-billion ridesharing company to a bully who won’t stay and play if he doesn’t like the rules. “The biggest issue for me is that we’ve allowed them to operate in this environment without the same regulations as the cab companies,” Garza said.

District 4 Councilwoman Colleen McIntyre, spoke against the ordinance but eventually voted for it saying, “So that this allows them to operate legally, I will vote yes.”

District 1 Councilwoman Carolyn Vaughn voted for the ordinance even though she asked that the item be pulled from the agenda. “I’m for Uber. I want them to stay here. I’m conflicted about this, but I’m not conflicted about the fingerprinting,” Vaughn said. “Chief Markle, I’m going to rely on you.”

Markle said, “The best preventative maintenance is to reduce risk factors.” He explained that using the FBI fingerprinting system offers three elements: a biometric association to a person, access to state and national databases, and continuous updates. Markle added, “We do reject cab drivers based on the fingerprinting.”

At-Large Councilman Chad Magill asked asked the representative for Uber, Lyft, or other rideshare companies to step to the microphone and answer some questions. After a moment of silence, no one appeared. Magill said, “We’ve listened to people who work for Uber who are trying to earn an income, provide for their family, and make people safer, yet the company they fight for is not here to support them.” Magill pondered Uber’s stance on fingerprinting their drivers and asserted that certainly a private company would want to keep their employees and riders safe. “I don’t think Uber, Lyft, or other rideshare companies want people to be unsafe. Safety in their models builds a successful company for them.”

Magill then asked if it was about cost. “I don’t know if anybody has looked at the market capitalization of arguably the most successful private company in the world, which is Uber. You look at financial websites, and it shows them anywhere from fifty-one to sixty-two and half billion dollars at market cap.” He then questioned why a company such as Uber failed to have a department that assisted cities in improving their ordinances versus threatening to leave cities that don’t let Uber have their way.

Through the discussion between Magill and Chief Markle, it was revealed that Uber has been operating illegally in the city for at least two years. As of last summer, Uber has used space at the TAMUCC Business Innovation Center as a meeting place for the drivers. “I just learned last week that Lyft has been operating in the city for several years, flying under the radar,” added Markle.

In addressing the fingerprinting issue as the reason Uber will leave town, Magill said, “What I surmise is the fact that it’s the difference between a 1099 and employee status with the IRS. They would instantly have thousands of employees; they would have costs in health care; and perhaps the 20% they take off the top in profits would be less. It doesn’t make it wrong or right; it’s a financial decision.” He also pointed out that Houston’s ordinance also requires fingerprinting, but Uber is still up and running in that city.

“There’s no 100% correct answer on this, but we’re elected to make decisions.” He then proposed that the council move forward with the ordinance but direct city staff to bring it back in a year’s time for a workshop review. Magill said this would tell Uber the city is going to be adaptable, and it would address the fingerprinting issue, as well. Magill asked Chief Markle not to cite anyone who has been driving or riding in any of these types of vehicles since the companies have been allowed to operate illegally. Markle assured Magill no citations would be issued.

Scott said, “Mayor, I respect you, and I respect all of y’all’s opinions. But in my heart I believe with this vote, Corpus will be less safe.”

District 3 Councilwoman Lucy Rubio said, “I take a lot of pride in being a law-abiding citizen, and I find it very interesting to hear the conversations that Uber has been operating illegally.” Rubio also alluded to the reports of Uber drivers allegedly committing criminal acts against their riders and reiterated the need for fingerprinting. “All we’re asking is that they follow the rules that have been in place.”

District 2 Councilman Brian Rosas echoed concerns of the other council members and supported Magill’s idea of revisiting the ordinance in a year. “I don’t think that Corpus Christi’s not being innovative and not being progressive. I think we’re just being cautious because we’re being proactive with what we’re doing. If we have the tools in front of us – when it comes to fingerprinting – let’s use it,” Rosas said.

As the vote neared, Vaughn said, “I think we’re going about this backwards. I think we need to look at the taxi regulations. I just wish that we could pull it and look at those regulations before we go making a decision.”

Mayor Nelda Martinez responded to Vaughn’s suggestion by saying, “I understand what you’re saying, but if we pull it, then Uber will not be able to operate legally. At least we can pass this and still look at this within the year’s time.”

McIntyre suggested that a contract be considered rather than an ordinance, omitting the fingerprinting. Martinez did not see this as an option. “What we’re doing is lowering our risk, not trying to increase them,” she said.

Corpus Christi is not the only city struggling with what to do about ridesharing companies not wanting to do fingerprinting. Even its hometown of San Francisco is at odds with Uber. Every major city in Texas has faced the Uber challenge. Some, such as Galveston and Midland, lost the service over their recent regulatory ordinances. Austin is putting it to a vote with the people in May, and San Antonio signed an operating agreement with Uber after watching the company abandon their city. Some consider Uber and other rideshare companies the embodiment of Ayn Rand’s philosophy of individualism and personal liberty. Others see it is as a threat to established rules and regulations designed to level the playing field for all companies in the ride-for-hire industry.

Update – The facts on the revenue for the City of Corpus Christi in Fiscal Year 2015-2016 (Current Budget), not including taxicab inspector, administrative costs, internal service costs, etc., are as follows:

“Page 108 and 109 in our FY15-16 budget states line 300960 taxicab franchises as $52,000 and line 301345 taxi driver permits $6,300. Those combined translate to 0.00025 of the $232,155,653 general fund and 0.000067 of our total $865,523,655 total adopted budget,” said Councilman Chad Magill.

Retired from education after serving 30 years (twenty-eight as an English teacher and two years as a new-teacher mentor), Shirley enjoys her life with family and friends while serving her community, church, and school in Corpus Christi, Texas. She is the creator and managing editor of The Paper Trail, an online news/blog site that serves to offer new, in-depth, and insightful responses to the events of the day. She also writes and edits for The Texas Shoreline News, a Corpus Christi print newspaper.